IOTA tutorial 1 What is IOTA and some terminology explained

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If you like this video and want to support me, go this page for my donation crypto addresses: • / mobilefish • Update: In this video i mentioned Curl and the vulnerability found in this algorithm. However it seems that this is NOT correct. • Please read: https://blog.iota.org/official-iota-f... • This is part 1 of the IOTA tutorial. • In this video series different topics will be explained which will help you to understand IOTA. • It is recommended to watch each video sequentially as I may refer to certain IOTA topics explained earlier. • • IOTA is not an acronym for Internet of Things, (IoT) but it just mean something very small. • David Sønstebø, Sergey Ivancheglo, Dominik Schiener and Serguei Popov founded IOTA in 2015. • IOTA Foundation main focus is Internet of Things and the Machine Economy but this technology is well suited for payments between humans as well. • The IOTA white paper can be found at: https://iota.org/IOTA_Whitepaper.pdf • All IOTA's which will ever exist have already been created. • The total IOTA supply is: 2,779,530,283,277,761 IOTAs • IOTA features • Scalability • The network becomes stronger when the number of transactions increases. • IOTA can achieve high transaction throughput. • Decentralisation • IOTA has no miners. Every transaction maker is also a transaction validator which means every transaction maker actively participates in the consensus. • No transaction fees • IOTA has no transaction fees which means IOTA can be used for micropayments. • Quantum computing protection • Quantum computers will be able to crack current data encryption methods much faster than current classical computers. • IOTA uses the Winternitz One-Time Signature Scheme which is a quantum-resistant algorithm. • See: https://eprint.iacr.org/2011/191.pdf • IOTA is the 3rd generation public permissionless distributed ledger, based on a Directed Acyclic Graph (DAG). IOTA called this DAG the tangle. • The tangle is NOT the same as the Blockchain. • A tangle is a data structure based on Directed Acyclic Graph (DAG). • Each transaction always validates 2 previous non validated transactions. • Directed means the graph is pointing to one direction. • Tips are the unconfirmed transactions in the tangle graph. • Height is the length of the longest oriented path to the genesis. • Depth is the length of the longest reverse-oriented path to some tip. • Making a transaction is a 3 step process: • Signing: Your node (computer / mobile) creates a transaction and sign it with your private key. • Tip Selection: Your node chooses two other unconfirmed transactions (tips) using the Random Walk Monte Carlo (RWMC) algorithm. • Proof of Work: Your node checks if the two transactions are not conflicting. • Next, the node must do some Proof of Work (PoW) by solving a cryptographic puzzle (hashcash). • Hashcash works by repeatedly hashing the same data with a tiny variation until a hash is found with a certain number of leading zero bits. • This PoW is to prevent spam and Sybil attacks. • The goal of the Random Walk Monte Carlo algorithm is to generate fair samples from some difficult distribution. • The Random Walk Monte Carlo (RWMC) algorithm is used in two ways: • To choose two other unconfirmed transactions (tips) when creating a transaction. • And to determine if a transaction is confirmed. • To determine the confirmation level of your transaction we need the depth to start from and we execute the Random Walk Monte Carlo algorithm N times, the probability of your transaction being accepted is therefore M of N. M being the number of times you land on a tip that has a path to your transaction. • If you execute RWMC 100 times, and 60 tips has a path to your transaction, than your transaction is 60% confirmed. It is up the the merchant to decide to accept the transaction and exchange goods. It is the same as Bitcoins where you want to wait for at least 6 blocks for high value transactions. Transactions with bigger depths takes longer to be validated. • An IOTA Reference Implementation (IRI), wallet and libraries are available at: • https://github.com/iotaledger • To setup a full node you need to tether with neighbours by exchanging your ip address with theirs. • Once you have sent a transaction from an address, you should never use this address again. • A tangle can get branch off and back into the network. This is called partitioning. • The Coordinator or ‘Coo’ for short, are several full nodes scattered across the world run by the IOTA Foundation. • It creates zero value transactions called milestones which full nodes reference to. • Check out all my other IOTA tutorial videos • https://goo.gl/aNHf1y • Subscribe to my YouTube channel: • https://goo.gl/61NFzK • The presentation used in this video tutorial can be found at: • https://www.mobilefish.com/developer/... • #mobilefish #howto #iota

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